Real Estate: what are the proposals of the candidates on the right for the elections of 2017? Firstly all promise to change the loi Alur when they come to power. The vast majority want to favour buyers and investors by revising existing aid packages. Here are the main ideas: Nicolas Sarkozy replace the loan at zero percent by a system of guarantee for first-time buyers, reduce CGT to 15 years… Alain Juppé: favour social housing, diminish restrictions on letting properties… Bruno Le Maire: lower notary fees on purchases of principal residences, lower VAT on first–time buyers for new housing …Nathalie Kosciusko-Morizet: boost property purchases by increasing the scope of zero percent loans, encourage renovation projects… Jean-François Copé: fix VAT at 10% for first-time buyers, put a ceiling on income from property to 33%… Jean-Frédéric Poisson: suppress all the aids for purchasing but reduce the taxes on all property purchases.
THE REFERENDUM AND FRENCH PROPERTY.
The decision has been made and negotiations have yet to start, but here is my view of the possible effects on British French Property buyers and owners following the referendum.
France, as well as Spain and Italy, have been very popular with British home buyers for many years, and certainly before the Common Market came into being. We have voted to leave so we might be in the same situation as the Americans and Australians who have been buying in France for many years – and live there very happily! If my friends and business associates in France are anything to go by, the British will continue to be very welcome.
Will there be any possibility of the British losing the ownership of their properties if we leave? Definitely not!
Would we need to apply for a visa to visit France and other EU countries if we vote to leave? In my view this is unlikely as there would probably be a reciprocal arrangement with all the EU countries.
It is possible that the British may need to apply for a fixed term ‘carte de sejour’ / permit to live in France and reapply before each expiry date. They may have to prove that they have enough wealth so as not to be a burden on French social security. They may even have to take a language test – but if living in any overseas country a basic knowledge of the language is essential.
With regard to healthcare the current reciprocal arrangements may be terminated, although members of the European Economic Area have reciprocal arrangements with the EEC countries. Of course, there are insurance companies specialising in this field – so I do not see a problem.
The state pension situation for British people residing in France and other EU countries will have to be agreed. There is some doubt as to whether or not state pension payments to the British residents in France will be protected by the ‘triple lock’. We can only hope that the government will not be vindictive and that the current situation will continue.
Mortgages when buying in the EU may be a problem in that interest rates may be higher for British or other ‘foreign’ buyers and higher deposits may be necessary. Banks work across borders and I feel sure that any problems will not be too onerous.
There may be increased social charges and / or capital gains tax when selling.
With regard to personal taxation, there should be little or no effect as Britain and France have a dual tax treaty.
It was inevitable that in the event of a vote to leave the EU there would be turmoil in the financial markets. However, steps have been taken which we hope will stabilise the market.
On balance I do not see any serious problems for French property owners and buyers. Property prices remain very low in most areas, and even with the current exchange rate it’s not a bad time to take advantage and buy!
Newsletter No. 16
The Market. The Pound continues to be strong with the mid-commercial exchange rate at the time of writing around 1.37€ / £1. In many regions property prices have been reduced further.
Paris. We focus on properties there as our support for the City of Light.
Sadly, darkness fell on the city with the terrible act of terrorism on 13 November. However, we receive information from several sources showing that life goes on and it appears that the resilient citizens of Paris and visitors are out and about again enjoying the shops, bars and restaurants. The property market does not appear to have been affected and, with the strong pound, a pied-à-terre has become more affordable for British buyers. Whilst property prices have dropped in many regions of France, Paris is a more stable market and has not been affected to the same extent.
The City of Paris is divided into different arrondissements or administrative districts which are numbered from 1 – 20. They spiral outwards clockwise from the 1st in the centre of the city. The city is also defined by the river Seine which has the 5th to 7th and 13th to 15th on the left bank – all others being to the north / right bank. Most of the main attractions are to the centre of the city. Encircling the 20 arrondissements is the highway known as the Périphérique. (It is very dangerous in our experience!) Outside the Périphérique are the banlieues some of which are definitely to be avoided.
Property prices in Paris are determined by the m² – the highest being in the centre. A 6th arrondissement apartment might be around €12,000 per m² whereas in the 19th around €6000 per m².
We are fortunate to have a partner agent in the 15th arrondissement who has an association with other agents in and around Paris giving access to properties in all areas. We show a few on our web site, but it’s a fast moving market.
For our selection: http://www.primefrenchproperties.com/ile_de_france.asp then click View All Properties.
Property Search. We will always be happy to search for properties if you cannot find what you want on our web site. Our prices are the same as those of our partner agents and include all agency fees.
Christmas and New Year. The festive season is upon us and whilst the French tend not to shut down for two weeks, they do take off more time than in the past. If you are thinking of looking at properties during the Christmas / New Year period, please check to see if the agent will be open.
We take this opportunity to send our best wishes for a Merry Christmas and a Healthy, Happy and Prosperous New Year.
(Please ask if you would like the full version with a selection of properties).
Drainage in France
In many areas of France, especially in the countryside where mains drainage is not available, sewage has to be treated on site – usually a ‘Fosse Septique’ (Septic Tank). However a new law was passed in 1992 which gave responsibility for the overseeing and regulation of old and new waste water installations to the local communes, i.e. the Marie / town hall.
This law stipulated that all household waste liquids have to be processed by means of a ‘Fosse Toutes Eaux’. This is a treatment / filtration system that ensures only treated waste is released into the environment.
If buying a French property, ensure that you know whether or not the drainage complies with this law.
Emanuel Macron, the French Economy Minister, has slipped in a sly clause in the decree that has been called the ‘Loi Macron’ to the effect that the 7 day cooling off period will be extended to 10 days after the compromis / preliminary contract has been signed. This is likely to slow down the conveyancing process. This law is now in force.
From the 1st July headphones may not be used by motorists, motorcyclists or cyclists. The only way to use a phone whilst driving will be to have a microphone with the caller on a loudspeaker. YOU HAVE BEEN WARNED!
On February 27, 2015: A decision of the European Court of Justice stated that non-resident property owners when selling their French properties will not have to pay the CSG and CRDS ( Social Charges) as they do not receive Social Security . In short: the tax rate (before deductions) is down from 34.50% to 19%!
From January 2015 the obligation to have tax representation in France for non-resident Europeans no longer applies.